Douglas J. Erwin is a culture nut. Culture, he says, allows people to work in a fun environment and gives them something to believe in. Erwin has created fun environments wherever he’s worked, from peddling an ice cream cart around the office and serving tasty treats to employees or turning a parking lot into a beach party. It’s hard to create that environment, but Erwin, who became chairman and CEO of The Planet in 2006, has focused on making sure that his 500 employees are excited to come to work each day at the Web and Internet technology hosting company. The business hosts more than 22,000 small and mediumsized businesses and 2.8 million Web sites worldwide, posting $110 million in 2006 revenue. Smart Business spoke with Erwin about how to get employees excited to come to work each morning and how to create a fun-filled environment.
Have fun and work hard. Create a workplace where people want to come to work. People like to work in cool places. You’ve got to have fun at work. If you don’t have fun at work, that’s not going to get transferred to when you deal with customers.
It should be an environment where, you walk in, the people will say, ‘Wow, this is cool.’ It’s creating an environment where it’s fun to work. Just something that would make it different.
If you could take somebody out of a standard job and move them to something else for a couple of days, it gives them a break and gives them a chance to see that maybe their job isn’t that bad after all.
Try to bring more value to a person’s day-to-day job by involving them in other things outside of their realm of job responsibilities. You get buy-in with these people because they had a chance to do something a little different.
Have the patience to make changes. It’s not an easy thing to do, to create culture. What’s worse is to start down that journey and not really want to. People will see through you immediately, and you will lose credibility as a leader. Hire somebody that can do it for you. Find somebody on your management team that has that twist.
You can’t just go in and wave a wand and say, ‘New sheriff in town, here’s the new culture, here’s what we’re going to do.’ It’s an evolution, a journey, a slow process.
The first thing I would ask is, ‘Do you really want to do that?’ If that person doesn’t have that passion to do that, it will fail immediately. Throw in a foosball table, big deal. Throw in a ping pong table, big deal. That’s not what makes it cool.
Just tap somebody on the shoulder when you walk by a cube and ask them what they do and listen to them. If they don’t jump up and start rattling off what the company does and how great it is, you know you’ve missed it.
If people are happy at their job, if they feel like they are more than a cog in a machine, if they’re getting paid fair, if their management treats them fair and if they’re n an environment that’s a cool place, you will have loyalty like you’ve never had before. That’s hard to do, and it takes time to build.
Be a model for employees. People are constantly looking at you. You could be walking down the hall to get a cup of coffee, and people know that you went by. Once you know that you’re in the limelight, you have to be on ‘go’ all the time.
When you talk about culture and successful cultures or not, you take a look at any of the successful companies, it starts right at the top with the leadership. Then it has to go to the next level down because if you have guys in the next level that are not leading and doing the same thing, you lose that whole side of the business.
The team should ask, ‘Are we approachable? Are we involved? Do we go out and talk to people? Are we behind closed doors?’
Let employees know their opinion is valued. You might not follow it, but at least you took the time to ask it.
Look for passion, integrity, trust, ownership and customer focus. You can see passion the moment candidates walk in and shake your hand. You can see it in their eyes, you can see it in their body language.
Start talking, and their eyes are either going to be engaged and locked in on you, or they’re going to be distant.
During an interview, I go to my board and start drawing and explaining. The passionate people will sit there and watch, and before the interview is over, they’ll be at the board drawing what they think, and you just see it in them.
Ask questions about how they manage people. Ask them how they fire people. There’s a right way and a wrong way to fire people, and most people do it the wrong way. The right way is to make sure that you’re helping people and that you’re helping them so much that they get frustrated and say, ‘I can’t take this anymore,’ and leave. A firing is usually a mutual thing if it’s done properly.
Talk to them about their style of management. Start asking them to describe their strengths, and the word trust is going to get used there one way or another. That trust, unfortunately, is going to have to be a gut feel.
Turn back around and ask them a question you asked four interviews ago and see how they answer the question, see if the story changes a little bit.
Look for a person whose capacity is greater than the job they’re going to be asked to do.
When a problem occurs, own it. Don’t pass it to somebody else to fix. You might need somebody else’s talent to help you fix it, but you own it until the customer’s happy.
HOW TO REACH: The Planet, www.theplanet.com or (713) 400-5400
A hot topic in the accounting world centered on the audit reform standards that the American Institute of Certified Public Accountants (AICPA) issued in March, 2006. The standards (SAS 104 through SAS 111), commonly known as the risk assessment standards (RAS), are effective for this year’s calendar year-end audits. They were designed to improve the audit process, requiring auditors to perform risk assessments for each client, while tailoring audit procedures to address specifically identified risks.
According to Andy Kuntz, a CPA with Briggs & Veselka Co. in Houston, the primary objective of the standards is to improve the auditors’ application of the risk model, through a more in-depth understanding of the entity and its environment, including its internal control and, ultimately, an improved linkage between the risks and the nature, timing and extent of audit procedures.
“The objective was a more rigorous and consistent audit process regardless of the size or type of entity being audited,” says Kuntz. “Many have drawn the parallel between RAS and private companies and SOX [Sarbanes-Oxley Act] and public companies.”
Smart Business spoke with Kuntz about the new standards, what they mean, what challenges they’ll present and how companies can overcome those challenges.
What are some changes companies can expect to see as a result of the new standards?
First, more thorough information must be assembled on the nature of your company and its industry and environment in order to identify risks. Significantly more work will need to be performed on internal controls, as well. In the past, our professional standards permitted us to obtain a basic knowledge of the internal controls, and then assess control risk at the maximum level. Now, we are required to obtain a more thorough understanding of the internal control structure, evaluate if controls are designed appropriately and determine if those controls are implemented. Then we have an option as to whether we want to perform specific tests of internal controls or to perform substantive tests. However, we are required to test controls if substantive procedures alone are not sufficient to reduce risk.
Additional changes that companies will notice in future audits are the types of audit evidence being acquired. Historically, an auditor may have simply asked someone in the accounting department to describe a process or an internal control. The RAS clearly indicate that inquiry alone is no longer sufficient. Auditors will now be asking for you to document your internal controls and other procedural items. Additionally, under the new standards, auditors are required to perform walk-throughs of certain transaction flows and corroborate information learned via inquiry with additional procedures.
Private entities can also anticipate different types of communication during the course of the audit. Engagement letters, which are essentially contracts between auditors and companies, will have revised language. Auditors will also communicate some additional information with respect to known and likely misstatements identified during the course of the audit. Private companies can also anticipate receiving additional comments from auditors with respect to issues or weaknesses in their internal control structures.
The RAS will require more time in preparing for and executing the audit. The audit will likely take longer, which could translate to higher fees, especially if proactive steps are not taken to document internal controls and ensure they have been implemented effectively.
What can a company do to prepare for the changes?
Management needs to understand that auditing private companies is a whole new ballgame now. Companies have to be proactive when it comes to these changes, and that should start with a meeting with your auditor. Other steps may include:
- Document your existing controls and ensure they are implemented as documented.
- Consider testing controls, and formally documenting the testing procedures performed, and share this information with your auditor.
- Evaluate your accounting department to see if the existing infrastructure is sufficient based on the size and complexity of the organization.
- Look at credit agreements to see what covenants are in place and whether there is a requirement to provide correspondence from your auditor related to internal controls and other matters. Many believe the new standards will result in additional auditor comments and potentially more severe comments which could lead to covenant violations and events of default.
- Finally, determine if an audit is the most appropriate service. In certain cases where an audit is not needed for an upcoming exit strategy, companies have negotiated to reduce the requirement from a financial statement audit to a financial statement review, which are not currently subject to the RAS.
Your company can save time, money and potentially improve the overall control structure by taking these steps now.
ANDY KUNTZ, CPA, is a principal in the Audit Department at Briggs & Veselka Co. in Houston. Reach him at (713) 667-9147 or email@example.com.
As John Kirksey continues to lay the groundwork for the future of Kirksey Architecture when he is no longer in charge, he realizes the delicacy with which he must take each step in the process.
“A lot of these professional service companies, the original founders control and manage the company way past the point they should,” says Kirksey, founder and president of Kirksey Architecture, a $21 million, 120-employee architectural design firm. “When they finally say it’s time for me to give some leadership to younger people, those people aren’t necessarily young anymore. They’ve never been given leadership, so they don’t know how to deal with it.”
By getting future leaders involved early, it becomes easier to achieve a seamless transition of power.
Smart Business spoke with Kirksey about the best way to develop leaders.
Q: What do you look for in a leader?
We put more of a premium on a spiritual leader than we do on a dollar-driven leader. People that exude self-confidence and a positive attitude and are supportive of other people and respect other people are much more powerful to us than someone who says they can bring in five new clients every month.
You really need to understand the characteristics that you are looking for in an individual that can translate into leadership in your company. Many times, it’s not going to be a Type-A personality. It’s going to be quietly self-confident people who have good primary skills that just need support and motivation and a good example to follow.
Q: How do you find these leaders?
We throw everybody in the pool, and certain people surface as being able to swim a little better than others. We just give them a lot of latitude to prove that.
They are people that take initiative and are proactive and want to be aggressively involved in developing their careers, not waiting for us to give them instruction. We ask a lot of the people that work here. We also expect them to take the lead.
We can tell people to be certain things, but unless they want to be it, it’s never going to happen. Instead of me telling people what they are going to be doing, you’ve got to listen. When people start telling you, ‘Here’s what I think I’d be good at,’ you can then really get behind them because generally, that’s what they will be good at.
Q: How do you gather employee input?
When we establish objectives, there are 11 team leaders. If you just take 120 people, divide it by 11, it’s very close to 10 or 11 people in a small political unit. We ask our team leaders to give us feedback on the pulse of what their team is thinking.
We break it down into units of 10. That gives you a lot better understanding if there are grassroots issues and problems that are happening within a team. An employee is more likely to share with their team leader than stand up in a meeting of 120 people and say, ‘I don’t really agree with this.’
We look at it both in front of our quarterly meetings and behind our quarterly meetings. In front of our quarterly meetings, we try to get our team leaders to bring issues to the table because they have weekly meetings with their team. After the quarterly meetings, we ask our team leaders to bring issues back to the table and respond to what people saw at the quarterly meeting. If anyone has an issue or a problem, we want to know about it.
Q: How do you deal with failure?
You try to get over it quickly. Instead of mourning the loss of that project, you go out, and there are plenty of other projects out there. The key thing for us is to acknowledge it right away and try to work to correct what it might be.
The only time we’ve really had big problems is when we tried to ignore a problem that we were part of versus immediately trying to deal aggressively with any problems we might have encountered.
Q: How do you empower employees?
We have a big commitment to personal respect for everyone and trying to allow people to find their own channel to success. When people have ideas, if we think it’s a good idea, we’ll give them all the running room they need.
Every Tuesday morning, we have a marketing meeting. Anyone in our company is invited to come to our marketing meeting. If people want to show some initiative, they’ll show up. That’s how you start identifying people that really would like to get more involved and take charge of their future and manage a little bit of their career.
HOW TO REACH: Kirksey Architecture, (713) 850-9600 or www.kirksey.com
Mergers and acquisitions (M&As), leveraged buy-outs, spin-offs, restructurings and work outs might sound to some business owners like terms that apply only to Fortune 500 companies or multinational corporations. There are times when small- to mid-sized businesses will need outside counsel to work with management and their in-house or regular outside lawyers in M&A transactions. When such needs arise there has to be a well-thought-out, mutually agreed-on plan in place if the client and attorneys are to work as a smoothly functioning team.
Smart Business spoke with Chris A. Ferazzi, an attorney with Porter & Hedges LLP, to learn how in-house and outside counsel can work efficiently to complete M&A transactions and satisfy the interests of all parties as expeditiously as possible.
Why would a small- to mid-size business need to hire outside counsel to complete an M&A transaction?
Businesses do not always have control over their own destinies. For example, they might become targets of companies that want to acquire them or they might actively seek ‘strategic alternatives,’ including selling their companies, and thus, putting the business in ‘play’ for sale to the buyer willing to pay the highest value. In addition, an experienced outside M&A lawyer is better equipped to negotiate more favorable terms and conditions in the transaction, including items that may have monetary implications, and will likely be in a position to complete the transaction on a more expeditious basis due to his or her understanding of the process and related best practices. In such scenarios, the client’s in-house or normal outside counsel may not have the experience to conduct a complex business transaction like an M&A transaction.
What services can outside attorneys provide for businesses in M&A transactions?
Outside counsel can provide advice on legal, regulatory and tax implications of alternative transaction structures and proposals; organize and implement legal due diligence reviews; draft and negotiate transaction agreements; tender offers and related documents; assess litigation and regulatory risks; and make presentations and offer advice to senior management and boards of directors during the process.
What must outside counsel understand to complete an M&A transaction successfully?
In addition to general M&A experience and competency to deal with the process and issues involved in a typical M&A transaction, the process requires a great deal of organization and communication. One of the most important criteria is to understand and prioritize the client’s goals, objectives and concerns in the transaction. Depending whether the client is buying or selling and the form of the consideration to be paid in the transaction, the client’s goals, objectives, legal duties and concerns can differ substantially.
It is also important to recognize that M&As are done from a transactional standpoint, rather than the litigation perspective where the ultimate goal is generally to get the deal done on terms as favorable as possible to your client but reasonable from the other party’s perspective. This requires a bit of give and take on both sides.
Understanding in-house counsel’s staff is also important. The outside counsel needs to understand what is important to in-house counsel to stay focused on, what he really cares about, and what he will rely on the outside counsel to handle rather than get involved with personally. In-house and outside counsel have to work as a team, and outside counsel should strive to make in-house counsel look as good and effective as possible to its management team and board of directors.
Is there a ‘game plan’ that the M&A team should follow to complete the transaction?
There are several steps that are consistent in virtually all M&A transactions. The team has to assemble a working group and make sure the members understand their related roles and responsibilities. Once the team is assembled, everybody involved in the transaction must be made aware of the proper person to contact for specific subject matters.
A key part of this process involves establishing detailed timetables and responsibility lists, since there will likely be timetables and responsibilities for different stages of the transaction.
The timetable for most M&A transactions is a moving target and will generally require frequent updates, but it is outside counsel’s goal to keep things on track as much as possible. To that end, it is generally useful to have daily or weekly telephone conferences or e-mails relating to status. The frequency of these communications will depend on what stage of the process the parties are in, and may include what legal or business decisions need to be made, what appropriate business information has to be made available to deal with specific issues and information about people in the process who might be impeding the work.
CHRIS A. FERAZZI is a partner, Corporate Practice Group, with Porter & Hedges LLP. Reach him at cferazzi@porter&hedges.com or (713) 226-6626.
Born: Durham, England
Education: Undergraduate degree, geography and geology, Durham University; MBA, Warwick University, England
What is the best business lesson you’ve learned?
I think having a good-news culture that is positive and energizing. I love living in America. It is the most positive culture I’ve lived in, and I’ve lived in six or seven countries worldwide. The U.S. is easily the most positive culture I’ve lived in. A good-news culture is positive and energizing, but sometimes it can hide some harsh realities that require radical improvement. So the business lesson is to really get underneath things and understand the good and the bad.
What skills or traits are essential for a business leader?
Have clear direction as to where you are going. Being highly focused in getting there. Being determined and being passionate is critical. Charismatic leadership is important, and being approachable and trustworthy. If you have those elements, you aren’t going to go far wrong.
What are several universal truths you’ve learned about leading a business?
Listening to customers and prospects is a start. Don’t try to run before you can walk, really. Try to play to your organization’s strengths, know where your organization is strong.
Definitely get some early wins; it’s motivational, it’s visible. Don’t wait nine months to get your first wins. Be highly externally visible, accessible, approachable. You need to be out there, not buried in some office. Keep things simple and focused, and I think being humble is important. I lived in China, and humility is a trait I learned there. Even if you’re the leader, you haven’t achieved trust until you’ve earned it. Having a significant level of humility can help build that trust and that transparency.
Harman on lunch meetings with employees: It’s pretty free-form; it’s not just about ideas. I ask questions about what is going well with the business, and what is not going so well, what we can improve, what are our personal feelings around leadership. To me, it’s a personal feedback session, and I can always come across as the stupid Englishman and ask silly questions.
Jack Antonini sees some holes in the old adage, ‘The customer is always right.’ But what Antonini doesn’t dispute is that a company must always listen to its customers and do what it can to keep them happy. Most customers don’t want to simply be told they are right; what they do want is a venue where concerns can be addressed, Antonini says. Antonini has used this approach to lead the ATM network operator to $294 million in revenue in 2006 with 275 employees. Smart Business spoke with the president and CEO about how listening nearly always produces more results than talking.
If you do that, then you can set challenging goals and win the support of your team to be able to really stretch to reach those goals. Part of it naturally entails a command presence. When there is a crisis, you need to be able to step up and lead, and people need to follow you. Have a command presence to deal with issues. Be a change catalyst. Life continues to change, our companies change, our competitors change and the environment changes.
If you don’t change, you’ll quickly stagnate and be unsuccessful. Focus on the right things to change and put the right energy into the organization to change it. Part of good communication skills is being able to take those important concepts that you may have and that broad vision and break it down into things that are communicable and measurable with appropriate timelines.
Then you can communicate that over and over so that people buy in to it and understand it.
Keep the future in view. If you’re not thinking about where you’re going, you’re not going to be prepared. Look out a few years yourself and think about how is the customer going to be doing business with us.
What’s it going to be like? Are we going to be delivering relevant products? What’s the customer experience going to be dealing with my company three years from now? How will technology have changed it, and how will environmental factors have influenced how they interact with my company?
We pulled our executive team together, went offsite and spent a day just talking about what was it going to be like. I had done a fair amount of thinking about it and I asked our team to do that, as well. We sat there and just created a visual story about what it was going to be like.
Once you do that, you quickly get the attention and buy-in from your leadership team. They begin to grasp how are things going to be different and how do we need to be different. If you think about the future like that and put it in terms that are real that people can relate to and understand, you’ll start to get their buy-in. They’ll start jumping in to support it and understand it, and they’ll want to help with it.
Respect your customer. The bottom line is, it’s not that the customer is always right. It’s that we always want to be sensitive to and listen to and be responsive to our customers.
Sometimes, frankly, they are wrong. But you don’t want to ignore them or upset them needlessly because of indifference. You want to deal with them in a responsive way that doesn’t just say they are automatically right, but in a way that says, ‘If I was in that situation, how would I want to be treated?’
You want your employees to deal with the customer that way. If I was in that situation and I was all upset, I wouldn’t want someone just to tell me, ‘You’re right’.
What I’d really like to know is that they hear what I’m saying about the problem and they’re going to do something about it. If you do that, that’s typically what satisfies the customer.
Encourage employee input. Be willing to make a decision and not just let it slide because you’re trying to reach a consensus. In the end, the CEO owns the responsibility and he is the one that is accountable for making the decision.
The hardest ones are the times that your team is evenly divided. Be the tie-breaker. I allow for full discussion and a collaborative input process for everybody to be able to share in the decision-making and to have buy-in.
Be the one that is willing to say, ‘OK, we’re going to make a decision here, and here’s how we’re going to go. When we make a decision, even if it doesn’t go your way, you’ve got to agree that we’re going to support each other when we walk out of that room.’
As long as they understand, typically what you find is people feel pretty good about the fact that they got a chance to have a say in it.
Stay on task. Whenever you are setting goals, whether it’s for a particular meeting or whether it’s to work through a particular issue or whether it’s even your very long-term strategic goals, you have to set very clear time frames and accountability. When we sit down to discuss a subject, even in the collaborative approach that we take, it’s always, ‘Here is what the issue is. Here is what we want to resolve.’
Either yes, this is a meeting at which we expect to resolve this, or no, this is an information-gathering meeting so that we can become informed, go back and do more research, and then come back to make a decision.
You start the meeting with talking about what kind of a meeting it is and what do you expect to accomplish. Then you make sure that before you adjourn the meeting, you’ve done that.
Show passion. You have to start with being able to create a vision of where you are going.
You’ve got to really be excited, passionate, energetic and enthusiastic. If you can’t demonstrate that in your leadership, that’s a real issue. Understand where you are in your industry and have a vision of where you want to take it and what you want to do with it.
HOW TO REACH: Cardtronics Inc., (281) 596-9988 or www.cardtronics.net
Companies often expect new hires to “hit the ground running,” but are businesses giving employees the resources and guidance to do this? According to a recent survey developed by Robert Half International, companies may be hindering new employees from performing at their best by not providing them a formal orientation program. The survey was conducted by an independent research firm and included responses from 492 full- or part-time workers 18 years of age or older employed in office environments.
“Only a small percentage one third of the workers we surveyed received any kind of formal orientation program from their company,” says Phil Willingham, senior regional vice president of Robert Half International, the world’s first and largest staffing service specializing in accounting, finance and information technology.
Smart Business spoke with Willingham about the importance of a formal orientation program and the key elements of a good plan.
Why is it important to have a formal orientation program for new hires?
Eighty-seven percent who underwent a formal orientation said that it helped them prepare for success within the organization. A formal orientation program increases the likelihood that employees ramp up more quickly because they feel supported and guided during the first days with the company. Employees who receive a formal orientation feel comfortable in their roles more quickly and achieve a sense of belonging. These attributes provide a good foundation for work productivity.
From the company’s perspective, providing a formal orientation helps get the new hire up to speed quickly and helps with retention, which reduces the high cost of turnover.
Why don’t more companies have a formal orientation program in place?
It could be an expense issue or a perceived expense issue. Or it may be time constraints. Growing companies are often stretched thin and unable to dedicate the necessary resources to develop a formal orientation program, which takes planning to put together.
What is the advantage of a formal orientation program versus an informal one?
Many companies already have some kind of informal orientation in place that may be effective in helping the employee feel comfortable. However, the value of a formal orientation program is in its consistency: It provides employers with an opportunity to reinforce the company’s values and set expectations, and it also lays the groundwork for keeping the company’s message consistent.
Not having a formal orientation program doesn’t necessarily mean employees won’t be successful. But the first days of work at a new company leave a lasting impression. The more thorough the orientation, the better new hires can acclimate quickly, learn what resources are available to them and gain a sense of the corporate culture.
What are some key elements of effective formal orientation programs?
At the very least, supervisors should give new hires a tour of the office, introduce them to their colleagues and explain security procedures. Make sure you invite senior management to meet with the new employee; an appearance by an executive or other company leader adds credibility and weight to the session. If this is not possible, a high-quality video could be a good substitute.
The first couple of days are also a good time to discuss the history of the company, explain the corporate culture and give some basic tips on what the new hire can do to succeed in the company. This is also a good opportunity to talk about short-term expectations (what is expected within 30 to 90 days which can also coincide with a training schedule) as well as the long-term vision (what is expected of the employee in the span of one to five years).
The important part of a formal orientation is that the message is coordinated and consistent throughout. The ideas conveyed in the orientation should reflect those expressed during the recruitment process and how the company presents itself to the outside world, as well.
The first days also need to include a meeting with the Human Resources Department for formalities such as giving the new employee a handbook, information about benefits, vacation time, etc. It is also important to give the new employee a list of key contacts in the company which can help speed up communication when an issue or a question arises.
A good orientation program is an ongoing process. Managers should ensure the orientation process doesn’t end when a person leaves the formal session. A mentoring program is an excellent way to provide ongoing guidance and support beyond the first few weeks on the job.
PHIL WILLINGHAM is senior regional vice president for Robert Half International in Houston. The company has more than 350 staffing locations in North America, Europe and the Asia-Pacific region, and offers online job search services at www.rhi.com. Reach Willingham at (713) 339-1060 or by e-mail at firstname.lastname@example.org.
Born: San Antonio
Education: Bachelor’s degree, business administration, University of Texas; MBA, Texas A&M University-Kingsville
What is the best business lesson you’ve learned?
I spent 30 years in the oil service business. I tell people I wasn’t nearly as smart as I looked in 1981 when oil was $50 a barrel, or as dumb as I looked in 1986 when oil was $8 a barrel.
I think you are never as good as you look at the top or as bad as you look at the bottom. The corollary to me is that as you look at a situation, it’s never as bad as it looks at the bottom or as good as it looks at the top. So you really have to maintain a healthy skepticism about every situation that you look at and have a significant amount of humility.
What traits or skills are essential for a business leader?
It’s this notion of integrity and wholeness, along with a willingness to make the hard decisions and accept accountability for those hard decisions, and being able to connect with all constituents.
What universal truths have you learned about leading a business?
Reward those who make it happen, and don’t keep people that you can’t trust.
What types of business books do you like to read?
I enjoy biographies of successful people and leaders. It helps you in understanding how people have gone through difficult situations and been successful.
Staff on staying visible to employees: I think that when you are in a position where people are somewhere between uncertain and skeptical, perhaps some even down into the cynical, if you don’t fill that vacuum for people coming on board, you are giving the power to those people who are cynical and skeptical.
Check your ego. You want to be a good CEO? Get the heck out of your people’s way and let them do their jobs. I have a respect for the people doing the job that they know more about their job than I do because they do it every day.
A production manager on a floor knows 10 times as much about what a production manager on that floor should be doing than I do. Why would I go in and interfere with him?
It’s my job to make sure all the managers in our company are good managers. It’s not my job to get in the way of them doing a good job.
Be patient. People like me are very impatient. We have to have the discipline of patience that, once you set objectives and goals, and you agree upon them, you allow the management to accomplish what they are setting out to do. To me, that is leadership.
If you look at surveys about job satisfaction today, usually the biggest problem is not pay. The biggest problem is nobody will let me do my job, and I don’t know what my job is. I don’t know what my responsibilities are. Those kinds of negative trends kill morale in a company.
If people don’t know what’s expected of them, it’s going to have a negative impact all around.
Encourage collaboration. We benchmark (managers) against each other. We have meetings several times a year looking at these benchmarks. We have classes where the good performing managers are educating the poorer performing managers in one particular area or another as to how they can do better.
Usually you’ll have one guy doing well in one area of responsibility and another doing well in another area of responsibility, and they can help each other out. It’s our job to provide the forum to make sure that whoever is doing the best job around the country in any given area has the opportunity to share how he is doing it with his comrades.
Listen to your customer. We stay very close to our customers and listen very hard when our customers have a complaint about anything. If we stay close to him, we’ll never be too far from doing the right thing.
At our national sales meeting we have each year, we have three or four customers come and speak to us about what they expect from our company.
Have personal relationships with the customer.
Look at business through the eyes of the customer and determine what’s important to him. What’s important to him may not be what’s important to us all the time. We look to learn as much as we can about what he wants and what his needs are, and we try and fill those needs.
To me, the customer is always right, even though he may be unreasonable at times. He’s paying you your paycheck. He’s buying a product from us at a price we agreed to.
If he wants to complain, we’re going to listen. Usually, if we pay attention to him, we’ll be better as a company because we’re doing things our customers want us to do.
Accept all opinions. I don’t necessarily want people to see things the way I do. We have a variety of opinions, and everybody expresses them. Our CFO is our main risk assessor, and he always takes a company-liability view of everything. That’s his job to do that.
It goes back to the empowerment. We empower people to say what they think. We want them to give us their opinion. We don’t want people saying, ‘Yeah, this is what Bill wants, so I guess this is what we’re going to do.’
That’s the last thing I want to have happen. I want people that are going to speak their minds. They’re not going to worry about somebody not liking what they say. They know they are not going to be criticized if they are critical.
Seek out input. Human nature being what it is, people would much rather be in charge of their own destiny than to have somebody else dictating to them as to what they’re going to do.
The only thing in our company that is dictated from the top down is that we will have an excellent safety program. The safety program itself is built up by the lower-level production people.
They form their own safety committees in the plant. They get to put the safety program in place, evaluate it, manage it and distribute safety bonuses to their employees. It’s all done through empowerment to the lower-level production management.
There’s nobody up top that’s dictating what the safety program will be. You could find some situations where you would have a top-down approach to safety where there would be a meeting of very top-level people and they would dictate what a safety program would be all the way down to the lower-level people. Then it wouldn’t be their program at the lower levels, and it wouldn’t be implemented that way at the lower levels.
It does give them ownership.
Don’t fear mistakes. We make mistakes and fail all the time. You just get up and get going again. My mantra is, just don’t make the same mistake twice.
I don’t pound my people, or myself even, for making a mistake. If you’re not making mistakes, you’re not trying to improve. But at the same time, you don’t want to be dumb and continue to make the same mistakes over and over. That’s definitely the wrong thing to be doing.
That’s the way I communicate it to our people. Don’t worry about making a mistake. Don’t look over your shoulder. Let’s learn from our mistakes when we make them. Let’s not make the same one twice.
HOW TO REACH: Trussway Ltd., www.trussway.com or (866) 999-8787
Finding the right people for your company is very important. The entire process of recruiting, interviewing,hiring and training is time-consuming and expensive. Losing newcomers before they ever become productive can be devastating. The best way to assure that once you find the right people they will perform well and stick around for the long haul is to get them thoroughly indoctrinated into your company’s philosophy and culture. If they feel an early sense of commitment and ownership, they are much more likely to stay with the company.
“Effective onboarding is one of the keys to employee retention,” says Dr. Michael Wesson, Department of Management, Mays Business School, Texas A&M. “The more quickly employees adapt to your culture and become fully productive, the better chance you have that they will become long-term employees.”
Smart Business talked with Wesson for more insight on effective onboarding.
What is onboarding?
Onboarding should be seen as the process by which employees are brought up to speed in terms of work performance and become organizational ‘insiders.’ It is not something that simply happens during the first week of employment; for most jobs the process can take from six months to up to a year. In order for an individual to become immersed in your culture and assimilated into the business, there are six key areas that newcomers need to thoroughly understand and adapt to. These areas are organizational goals and values, history, politics, language (slang and jargon), people, and performance proficiency.
Why is onboarding important?
Research clearly shows that effective onboarding leads to higher levels of organizational commitment, job satisfaction and lower levels of turnover among organizational newcomers. Employees tend to be overwhelmed when they start a job with a new company. There is a lot to learn in a very short period of time, especially when you expect them to start performing well right away. Simply having them fill out a W-2 and showing them where the restrooms are won’t cut it. It is potentially the single best period of time to share with employees what the values and goals of the organization are and what is expected of them. Too many companies squander this unique opportunity.
What are some of the keys to proper onboarding?
Planning is one of the main keys to success. What are the most important things you want your employees to adapt to and learn? When is the optimum time for them to learn this information, who is the best person to provide it, and what is the best method to convey the information to them? Many companies are moving towards providing computer-based orientations. My research shows that while this can be effective in delivering some types of information, it is sorely lacking in its ability to deliver much of the socially rich content that is arguably the most important. Bringing in people as part of a group helps them to adjust they have an immediate network of employees in a similar situation and they are more willing to ask questions.
Involving the CEO or other high-level managers is also important it sends new employees a signal that they are important to the organization and that the values being shared with them are not simply words on a written page.
What are some of the most common mistakes in onboarding?
The most common mistake is assuming that employees will just ‘pick it up’ in a short period of time. Managers mistakenly think that a good orientation program is too expensive. However, the cost of losing employees because their expectations aren’t met or are taking longer to master their jobs, and the amount of time supervisors spend poorly covering the same information is much more expensive to organizations in the long run. One other major mistake is assuming that your experienced new hires don’t need onboarding help. I have research that shows that new employees with significant amounts of experience are perhaps the most difficult group to truly socialize to values of their new company partly because they think they know everything already.
Understanding that the socialization process starts well before new employees show up on their first day is also important. Research shows that impressions newcomers get during the recruitment and selection process, and even the signals companies send during salary negotiations, affect incoming expectations and attitudes. These attitudes are hard to change once a new employee starts work. Let employees in on the company culture up front. Send them information after they are hired, but before they actually start. Give them as much information as possible.
DR. MICHAEL WESSON is in the Department of Management at Mays Business School, Texas A&M. Reach him at (979) 845-5577 or Wesson@tamu.edu.